The DAX is currently quoted at 6.600 points and you expect falling quotes in the coming weeks or months. Thus you purchase a turbo-short on the DAX 30 with a strike at 6.800 points and a knock-out barrier at 6.705.
The ratio is 1/100, thus the product costs (6.800-6.600)/ 100 = 2 EUR.
Decreases the DAX 30 by 150 points, the turbo-short increases by 150/100=1,50 Euro to 3,50. Increases the DAX 30 to 6.705, it will be knocked out and you will automatically receive the residual value.
1. Relevant scenario
2. Trading with technical analysis
With the turbo-short one can profit from falling quotes with a constant leverage. As long as the quote of the underlying security does not rise to the knock-out barrier, the turbo-short moves analog to the underlying, but due to the much smaller capital demand with an according leverage.
If at any time the quote of the underlying security rises to the knock-out barrier, the turbo-click will be knocked-out and the investor receives the residual value.
If the quote of the underlying security stagnates, the turbo loses a neglectable value, as on interest costs are charged on the financing level of 0,007%.